#Pakistan shares end higher ahead of #MSCI announcement to upgrade country to #EmergingMarkets status http://reut.rs/1VUulOH via @Reuters

Pakistani stocks closed higher on Monday in a volatile trading session ahead of a much-anticipated MSCI announcement on whether the bourse would be reclassified as an emerging market, analysts said.

The benchmark 100-share index of the Pakistan Stock Exchange finished 0.11 percent higher at 36,979.96.

The index clocked in an intraday range of more than 440 points, hitting a low of 36,637.81 in early trading before bouncing back towards the end of the session.

"Market sentiment remained sombre today, in line with sentiment seen in global equities and commodities ahead of central bank meetings in the U.S., U.K. and Japan this week," said Gohar Rasool, head of international sales at Inter Market Securities Pvt Ltd.

MSCI is due to announce whether it will be reclassifying Pakistan as an emerging market on Tuesday.

The stock exchange was dropped from the MSCI Emerging Markets Index in 2008, but Pakistan has in recent months launched a final push to get back in so it can vastly expand its pool of potential investors.

Among index heavyweights that gained on the day were Engro Fertilizers Ltd, MCB Bank Ltd and Fauji Fertilizer Company Ltd.

Oil stocks took a hit as international crude oil prices declined. Oil and Gas Development Company Ltd closed down 0.93 percent while Pakistan Oilfields Ltd was down 0.75 percent.

Traded volume on the day stood at 104.7 million shares, with traded value at 6.67 billion rupees ($63.83 million).

#Asia's new Great Game. #Modi #Afghanistan #India, #Pakistan #Iran #China #US #Chabahar #CPEC #CentralAsia


http://www.dawn.com/news/1264242

By Munir Akram


With a population of only around 50 million, Central Asia will not become a huge market for manufactured goods. It will be twice as expensive for India to send goods to Central Asia through Chabahar than it would be overland across Pakistan. Indian goods are thus unlikely to be competitive against Chinese products shipped overland.

Also read: Lessons from Chabahar

The strategic advantages for India are also questionable. Its influence in Afghanistan will be more dependent on Iran. Pakistan’s cooperation will continue to be essential to restoring peace in Afghanistan. Indian shipping lanes to Chabahar will be vulnerable to disruption. India’s limited influence in Central Asia will not dent that of Russia and China.

The new Great Game will increasingly revolve around China’s One Belt, One Road vision of land and sea connections between Asia, Europe and beyond. The China-Pakistan Economic Corridor (CPEC) is the first component of this ambitious project.

In comparison to the Chabahar route, the strategic and economic implications of CPEC are enormous. It will transform China from a one- to a two-ocean power; enable a part of its $4000 billion annual trade to circumvent the Malacca straits and other potential choke points in the Indian Ocean and shorten China’s supply lines to the Gulf, West Asia and Africa. For these reasons, if no other, China has a vital stake in Pakistan’s strategic stability and socioeconomic development. The Chinese commitment of $46bn for CPEC projects is but the first instalment of the massive capital which China is prepared to deploy in Pakistan.

Instead of being distracted by the moves of its adversaries, Pakistan must remain focused on the implementation of CPEC. This strategic enterprise should not be allowed to be stalled or delayed by external pressure or internal politics, inefficiency or corruption. It would be wise to create a separate and independent CPEC Authority which can be a ‘one-stop-shop’ entrusted with achieving CPEC’s enormous potential for Pakistan’s development. CPEC projects must go beyond infrastructure development to encompass manufacture, consumer goods, housing, health, textiles, finance and other sectors. To this end, the interaction between Pakistani and Chinese private- and public-sector companies must be actively expanded and intensified. Some of the externally imposed limitations on CPEC investment projects, such as restrictions on ‘sovereign guarantees’ for debt finance, need to be removed expeditiously.

CPEC faces threats from Pakistan and China’s adversaries. These will have to be met forcefully.

India’s opposition has been announced openly. New Delhi will continue to utilise Afghanistan as a base to destabilise Pakistan and undermine CPEC. The recent spate of attacks on Chinese workers in Pakistan is no accident. Pakistan will have to further enhance security for them and consider direct action to remove the Afghan-based threat from the Tehreek-i-Taliban Pakistan.

Iran has assured that Chabahar is not designed to compete with Gwadar or CPEC. Pakistan and Iran can cooperate for mutual benefit: to end terrorism in Balochistan, expand trade, and construct the Iranian gas pipeline and a Gwadar-Chabahar economic corridor. However, Tehran often wants to run with the hare and hunt with the hound. Some recent events have sent disturbing signals which Pakistan cannot ignore.

To balance the growing Indo-Iranian relationship, Pakistan must maintain and reinforce its relationship with Saudi Arabia and Turkey. It would be in Pakistan’s interest to help in giving substance and form to the ‘Islamic coalition’ hastily formed by Riyadh. It should also convince the GCC states of the benefits of CPEC as a path to their closer connection with China.

America is and will remain a major player in the new Asian Great Game. ...

THE EXPRESS TRIBUNE > BUSINESS
Pakistan, China ink agreements worth $4.2b

As per the contracts, China would provide a concessionary loan of $1.3 billion for the 120-kilometre long Thakot-Havelian section of Karakoram Highyway-II (KKH-II) and $2.9 billion for the 392-kilometre Multan-Sukkur section of the Lahore-Karachi motorway.

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Since China is providing concessionary loans for both projects, the contracts have been awarded on a government-to-government basis, waiving the condition of international competitive bidding.

Out of the $46 billion CPEC investment package, roughly $11.5 billion is reserved for the road and railways infrastructure. China has promised to give concessionary loans for four infrastructure projects. Two of these projects will get interest-free loans.

http://tribune.com.pk/story/1096762/cpec-eastern-alignment-pakistan...

From Business Recorder:

China would extend assistance to Pakistan at 1.6 percent interest rate for infrastructure projects under the China-Pakistan Economic Corridor (CPEC), it is learnt. Member, Infrastructure and Regional Connectivity of Planning Commission Malik Ahmad Khan confirmed that China would extend assistance to Pakistan at 1.6 percent interest for infrastructure projects under CPEC. "We wanted China to reduce this rate from 1.6 percent to 1 percent. And the Finance Division is making efforts in this regard," he added.

Under the China-Pakistan Economic Corridor Projects (CPEC), China has promised to invest around $11.8 billion in infrastructure projects and $33.8 billion in various energy projects which will be completed by 2017 at the latest. According to sources, the corridor is a 2,700-kilometre highway that would stretch from Kashghar to Gwadar through Khunjrab. The CPEC will integrate the economies of the two friendly countries; it envisages several economic zones.

http://www.brecorder.com/market-data/stocks-a-bonds/0/1223449/

#China to lend $5.5 B and ADB another $2.5 billion for #Pakistan's $8 B #Rail link project. #CPEC http://ecoti.in/z8wb4Z via @economictimes

About 75 per cent of the country's (rail) cargo and passenger traffic passes through the 1,687 km-long Peshawar-Karachi rail line. 

Earlier, China had agreed to provide $3.7 billion out of the $46-billion CPEC program for the ML-I project and "now it has decided to increase its contribution to $5.5 billion," Iqbal said. 

The Asian Development Bank (ADB) would provide $2.5 billion t .. 


The Peshawar-Lahore section of the ML-I will be built with the ADB loan. 

The rail project would be completed in five to six years after which the rail speed would double to 180 kilometres per hour.

Regional cooperation forum: #CAREC offers avenues for deeper economic links among Stans #CentralAsia #Pakistan #CPEC

http://tribune.com.pk/story/1215393/regional-cooperation-forum-care...

ISLAMABAD: Pakistan recently hosted the 15th meeting of the Central Asia Regional Economic Cooperation (Carec), a body working for the collective benefit of the region by promoting economic cooperation.

Pakistan is increasingly looking at Central Asian states in an effort to forge trade links and give a fillip to its dwindling exports. However, so far, it has not been able to tap the full trade potential because of lack of infrastructure for connecting the South and Central Asia regions.

Carec is also pushing ahead with plans to encourage regional connectivity to enhance the trade volume.

In the Carec meeting, more than 200 participants from 10 member states and multilateral development partners participated. The member countries included Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Tajikistan, Turkmenistan and Uzbekistan while Georgia took part as an observer.

Carec is an important forum that encourages regional countries to develop physical networks and infrastructure and ensure peace, stability and economic development.

Strategies and initiatives were highlighted at the huddle to stimulate much-needed investment in energy sector of the member states. After a briefing on selected case studies undertaken by Carec members including Pakistan, prominent investors shared their insights to identify and make investments in energy projects.

Addressing the meeting, Prime Minister Nawaz Sharif appreciated that Carec had mobilised $29 billion for pouring into regional development projects and voiced hope that a mid-term review of the regional body in the next 10 years would prove to be an opportunity to fast-track economic cooperation.

The regional connectivity may lead to economic development and prosperity of the region. In this connection, Pakistan is working on energy projects such as the Central Asia-South Asia 1,000-megawatt (Casa-1,000) power import project and the Tapi gas pipeline that will start from Turkmenistan.

The Casa-1,000 is also going to pave the way for digital connectivity between the two regions through a fibre optic cable network called Digital Casa-I, which will link Tajikistan, Afghanistan and Pakistan.

The existing cable reaches Pakistan after going through a long route. It first goes to Russia, extends to Europe and then comes to Pakistan.

The new project will provide a good route to connect the two regions. It will allow regional countries to become independent while tapping the international internet channels.

CPEC support

In his welcome address at the Carec ministerial meeting on the theme “Linking connectivity with economic transformation”, Finance Minister Ishaq Dar said the China-Pakistan Economic Corridor (CPEC) programme, which Pakistan had undertaken, would complement regional connectivity initiatives of Carec members.

He stressed that the CPEC offered a massive opportunity for connectivity between Central Asia, Middle East and Africa and was bound to play a defining role in economic development of the two regions.

Dar said improving the transport corridor was not an end in itself but it was an investment in establishing sound infrastructure and complementary frameworks for shared prosperity of the present and future generations in the region.


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The markets of Central Asian states and Russia are open and this is the area where Pakistan needs to increasingly focus on.

With an air of distrust between Islamabad and Washington over the latter’s inclination towards Delhi, China and Russia could not only support Pakistan’s economy, but they will also block India’s efforts to isolate Pakistan in the international arena. To achieve all that, Pakistan needs to forge deeper links with the Central Asia region and Carec can play a decisive role in that connection.

CPEC to strengthen CAREC by expanding north-south corridor: 


The primary north-south transport corridor in Pakistan runs from Torkham on the northern border with Afghanistan and passes through primary production and population centres such as Peshawar, Islamabad, Faisalabad, Multan, and Khanewal, before reaching the port city of Karachi in the south. The corridor serves the economy of an area that accounts for 80 percent to 85 percent of the country’s GDP and in the regional context, forms an integral part of the Central Asia Regional Economic Cooperation (CAREC) corridors 5 and 6 after Pakistan's accession to the CAREC Programme in 2010.

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The M-4 Motorway, linking Faisalabad with Khanewal, would be completed by July 2018, said National Highway Authority (NHA) member Mansoor Ahmed Sirohey on Friday.

He told journalists that the Asian Development Bank (ADB) is the leading financer in M-4 Motorway, as the bank disbursed $170 million (77 percent share of the project) in 2009 for construction of a 58km four-lane motorway M-4, connecting Faisalabad to Gojra (section I). This section was completed in December 2014.

Similarly, the ADB would provide 56.15 percent share of the funding of the section II of the M-4, which will construct the 62km four-lane access controlled motorway connecting Gojra and Shorkot. Meanwhile, government of the United Kingdom would provide grant of 29.02 percent and Pakistan would release share of 14.83 percent. The project is expected to complete by 2018, he added.

Sirohey said that contract for section-III of the motorway linking Shorkot to Khanewal has been signed and construction is expected to commence in December 2016. The ADB noted that M-4 Motorway in Punjab, linking Faisalabad with Khanewal, will cut travel time and support the government's broader goal of improved investment and trade flows along the country's vital north-south corridor route. Once fully completed, the M-4 Motorway will provide a faster, safer, more cost-effective north-south route to the currently overburdened national highway 5 and other existing narrow and congested routes.

http://nation.com.pk/business/19-Nov-2016/project-to-be-completed-i...

#Pakistan #Railway track upgrade to include overpasses, underpasses & grade separation for high-speed trains #CPEC https://www.geo.tv/latest/124093-Railway-tracks-to-be-made-gate-fre... …

LAHORE: Railway tracks from Karachi to Peshawar will be made gate-free and signal-free under the next phase of the China-Pakistan Economic Corridor (CPEC), Geo News reported, citing sources.

A fence would be built around the tracks, similar to Motorway, and an underpass or overheard bridge would be built at every gate on the tracks, the sources said.

Work on the project would be initiated from January. The first phase of the project would focus on railway tracks between Rawalpindi and Peshawar.

The signaling system in Pakistan Railways will also be upgraded under the project.

According to the sources, the purpose behind making railway tracks gate-free and signal-free is to make train journeys safer and faster for the public. The fencing and bridges would also lead to a reduction in accidents.

Once the project is completed, the tracks would be able to accommodate high-speed trains. The railways authorities have completed the planning for the project, the sources added.

#GE Transportation in #Eerie #Pennsylvania to build 20 #locomotives for #Pakistan, creating new jobs for #Americans 

http://www.goerie.com/news/20170609/ge-transportation-to-build-20-l...

GE Transportation workers in Erie will have more work to do, thanks to a new order for 20 locomotives from Pakistan Railways.

Top NewsClick Now and Read Later.


This latest order, announced this week, represents an expansion of a 2015 order for 55 Evolution series locomotives, 32 of which are already in service.


At about 2,000 horsepower, the locomotives being built for Pakistan are lighter and less powerful than the 4,600 horsepower locomotives the company builds for North American customers.

“These lighter-weight locomotives,” according to a statement from GE Transportation, “are designed to better maneuver difficult access roads.”

For Pakistan, the purchase is part of a strategic move to increase the percentage of freight moved by rail from 4 percent to 20 percent in the next 10 years.

For the Erie plant, which has been building about two locomotives per week, the order represents a small but important boost that could represent a certain amount of security at a plant where about 1,500 jobs were cut in the first half of 2016.

“Any work is good news,” said Scott Slawson, president of Local 506 of the United Electrical, Radio and Machine Workers at GE Transportation. “We are in a downturn that we are hoping to turn around.”

There have been some positive signs lately.

Slawson said a handful of people on the layoff list have been called back to work recently. While some of those employees will be taking the jobs of workers who have retired, Slawson said a number of others will provide labor in areas of specific need within the company.


Workers in Erie recently wrapped up work on the first two locomotives in an order of 1,000 locomotives for Indian Railways. The first 40 locomotives will be built in Erie, followed by 60 so-called kits that will be built in Erie and then shipped to India for final assembly. The remaining 900 locomotives will be built in India over the next 10 years.

Slawson said the employment situation at the Erie plant, which builds locomotives for the international market, might be substantially different if the Indian Railways order, the largest in the company’s history, was to be built exclusively in Erie.

“That would have been huge,” he said.

Rail network to connect #Gwadar with #China, #Afghanistan under #CPEC. 1,328 km new line from #Jacobabad and #Quetta via Basima to Gwadar at a cost of $4.5 billion and new 560km rail track from Quetta to Kotla Jam on ML-2 via Zhob and DI Khan https://profit.pakistantoday.com.pk/2019/08/18/pakistans-railway-ne... via @Profitpk

ISLAMABAD: The ambitious plan of connecting Pakistan’s railway network from China and Afghanistan to Gwadar deep sea port under China Pakistan Economic Corridor (CPEC) has been declared strategically important by both Pakistan and China.

The plan will help commercially viable transportation of goods from China and Central Asian States to the port city, besides boosting trade and tourism activities in the country.

The already agreed CPEC project for up-gradation of existing Main Line 1 (ML-1) railway track from Peshawar to Karachi will be materialised in the first phase, followed by new railway lines that would be laid across the country to boost trade activities under CPEC.

According to the plan, a new 1,059 kilometer railway line from Havelian in Pakistan’s province of Khyber Pakhtunkhwa (KP) to Kashghar in Chinese province of Xinjiang would be laid to connect both the countries through railways.

Another 1,328 kilometer long new railway line from Jacobabad and Quetta via Basima to Gwadar has also been planned to be constructed at a cost of $4.5 billion to connect the port city with the rest of the country and China. Similarly, Pakistan Railways also plans to lay a new 560km railway track from Quetta to Kotla Jam on ML-2 via Zhob and DI Khan.

A new railway line from Peshawar to Torkham in Afghanistan is also part of the plan, however, in a fresh development, a source in the ministry of planning and development said that the railway network would be extended deep in the country to Kabul, and then to Mazar-e-Sharif, so that the Central Asian states could be connected via railway line with Gwadar.

All these new railway projects have been put in the long-term plan of CPEC which is supposed to be completed by 2030. “In order to effectively eventuate ML-1 project, it has been decided to break the project into three packages,” an official in the railways ministry said.

The ministry of railways has already submitted the PC-1 of Package-1 to the Planning Commission.

“Keeping in view the importance of the project, Prime Minister Imran Khan has directed the authorities concerned to start work on the project as early as possible. Therefore, the PC-1 of first package of the project is expected to be considered by the Central Development Working Party (CDWP) later this month which would refer to the Executive Committee of National Economic Council (ECNEC) for final approval,” an official in planning ministry said.

He further said that once approved by the ECNEC, this project would be presented before the 9th annual meeting of Joint Coordination Committee (JCC) on CPEC between Pakistan and China to be held in October this year for finalising financing modalities.

The scope of work includes up gradation and doubling of ML-1 from Karachi to Peshawar and Taxila to Havelian (1,872km) including provision of modern signaling and telecommunication systems, conversion of level crossings into underpasses/flyovers and fencing of the track.

CPEC project leader in Ministry of Railways Basharat Waheed said that on completion of ML-1, Pakistan Railways will reap the advantages of increase in speed from 65-105 km/hour to 120-160 km/h, increase in line capacity from 34 to 171 trains each way per day, increase in freight volumes from 6 to 35 million tons per annum by 2025, increase in passenger trains (ex-Karachi) from 20 to 40 each way per day and increase in railway share of freight transport volume from less than 4% to 20%.

Journey time from Karachi to Lahore will be reduced from existing 18 hours to only 10 hours while that from Islamabad to Lahore will be reduced from four-and-a-half hours to two-and-a-half hours, he added.

#CPEC Re-Emerges In #Pakistan With Flurry Of Major #China Deals: 2 #hydropower projects costing $3.9 billion, and another to revamp Pakistan's colonial-era railways for $7.2 billion -- the most expensive #Chinese project yet in Pakistan. https://www.ndtv.com/world-news/belt-and-road-re-emerges-in-pakista... via @ndtv

China's Belt and Road program has found new life in Pakistan with $11 billion worth of projects signed in the last month, driven by a former lieutenant general who has reinvigorated the infrastructure plan that's been languishing since Prime Minister Imran Khan took office two years ago.
The nations signed deals on June 25 and July 6 for two hydro-power generation projects costing $3.9 billion in the Pakistan-occupied Kashmir region, and another to revamp the South Asian nation's colonial-era railways for $7.2 billion -- the most expensive Chinese project yet in Pakistan.

Khan's government appointed Asim Saleem Bajwa last year to run the China-Pakistan Economic Corridor Authority, which oversees more than $70 billion in projects from power plants to highways.

He also joined Khan's cabinet in late April, becoming one of more than a dozen former and current military officials in prominent government roles as the army expands its influence in the country.

The Chinese financing has helped rid Pakistan of an electricity deficit that left exporters unable to meet orders and major cities without electricity for much of the day. Still, the implementation of some investments appeared to stall since Khan came to power, with no new projects announced in 2018 and very few in 2019.

Since Chinese President Xi Jinping launched the initiative in 2013, the World Bank estimates about $575 billion worth of energy plants, railways, roads, ports and other projects have been built or are in the works across the globe. Its progress has slowed recently, dogged by accusations that China is luring poor countries into debt traps for its own political and strategic gain.

"The reality is that much of CPEC, like the Belt and Road more broadly, has been paralyzed," said Jonathan Hillman, a senior fellow at the Center for Strategic and International Studies in Washington, referring to the China-Pakistan Economic Corridor. Pakistan "is a flagship for China's Belt and Road, so the need to show progress is even more important."

In a tweet last month, Bajwa said some detractors had given the "false impression" that CPEC had been slowed. Not only has the pace of work on projects picked up recently, but a great deal of ground work has been done to launch phase two of the project that also includes special economic zones to lure Chinese manufacturers, agriculture, science, technology and tourism, he wrote.

"The prime minister pushed very hard on this," said Abdul Razak Dawood, Khan's adviser on commerce and investments said by phone. "We feel that we have to get more and more hydro in our energy mix."

A spokesman in Bajwa's office said he was not immediately available to comment.

Little Progress

Pakistan's army is already responsible for securing every single Beijing-funded project scattered across the country, from the mountains near the Chinese border to the desert in Gwadar where the Chinese operate a port. Its role has become even more important following terrorist attacks on three Chinese-related projects in the past year.

"There is no doubt that PM Khan's arrival slowed the pace of CPEC projects," said Mosharraf Zaidi, a senior fellow at Islamabad-based think tank, Tabadlab, and a former principal advisor to the foreign ministry. "The renewed energy and approval we are now seeing is almost entirely likely due to the chairperson having settled in, and being added to Prime Minister Khan's cabinet."

Railway Minister Shaikh Rasheed's Tweet:

انگریز نے ٹریک بنایا ہم نے 70 سال ٹریک کو ہاتھ نہیں لگایا،ٹریک بنے گا اس میں کوئی ریلوے کراسنگ نہیں ہو گی،7 گھنٹے میں کراچی سے لاہور کا سفر ہو گا،اسی سال یہ کام شروع ہوگا اور چین کی جس بھی پارٹی کو کنٹریکٹ ملے گا،ڈیڑھ لاکھ لوگوں کو کنسٹرکشن میں نوکری ملے گی۔

https://twitter.com/ShkhRasheed/status/1281597235898331136?s=20

$8.6 billion 1,872 kilometer ML-1 #railway project to turn #Pakistan, particularly #Peshawar, into a global #business hub. It will create 150,000 jobs in Pakistan. Pakistan & landlocked Central Asian nations will also benefit from it. #trade #CPEC #China https://www.thenews.com.pk/print/753468-ml-1-to-turn-pakistan-into-...

ML-1 Railway-line project will turn Pakistan, particularly Peshawar into a global business hub & help open up Central Asia, says a report published by China Economic Net (CEN) on Thursday.

According to the report, experts call ML-1 project a “game changer of CPEC” and predict that in future Peshawar city will the center of business activities. Not only Pakistan, but the countries of Central Asia, wherein many are land-locked, will also benefit from it.

For the rehabilitation and upgradation of the 1,872-kilometer railway line, the Government of Pakistan’s Executive Committee of the National Economic Council (ECNEC) approved ML-1 project worth $ 6.8 billion on August 5, 2020.

As per the plan, the Chinese Government under CPEC would provide 90% of the financing of the project.

The project is also expected to generate 150,000 jobs in the country. Basharat Waheed, the CPEC project head in Ministry of Railways told CEN, “The entire track from Karachi to Peshawar would be upgraded.

The worn-out earthworks under the existing 150-year-old railway line will be completely uprooted and fresh sleepers and rails would be installed with new earthworks with an estimated lifespan of at least 50 years”.

ML-1 Project: How can an outdated railway line change the destiny of Pakistan? - BBC URDU

https://youtu.be/D7pTwYlzkrI

یک وقت آئے گا جب پاکستان میں ٹرینیں بنا توقف 160 کلو میٹر فی گھنٹہ پر دوڑیں گی اور لاہور سے اسلام آباد آپ صرف ڈھائی گھنٹے میں پہنچ پائیں گے۔ کراچی سے حیدرآباد تو صرف ایک گھنٹہ لگے گا۔ یہاں تک کہ مال بردار ٹرین بھی 120 کلو میٹر فی گھنٹہ پر چلے گی۔ ایسا اس وقت ہو گا اگر آٹھ برس کی مدت میں کراچی سے پشاور تک جانے والی مین لائن ون چین کی مدد سے بحال ہو پائے گی۔ اس سے نہ صرف ریلوے کو نئی زندگی ملے گی، پاکستان کی معیشت بھی اس سے مستفید ہو گی۔ ایم ایل ون کیا ہے، کس حال میں ہے اور کیسے بحال ہو گی، دیکھیے ہمارے ساتھی عمر دراز اور فرقان الٰہی کی اس رپورٹ میں

Realizing strategic ML-1 #railway project in #Pakistan under #CPEC: A forward movement for BRI. Goal is to modernize the dilapidated railway #infrastructure of Pakistan. It has great strategic importance for both Pakistan and #China.- Global Times https://www.globaltimes.cn/page/202111/1240207.shtml#.YaUKiB35SZA.t...

Upgradation of the Pakistan Railway's Mainline-I, which runs north to south connecting the country, is envisaged under the multibillion dollar China-Pakistan Economic Corridor (CPEC) - a flagship project of the Belt and Road Initiative (BRI). The goal is to revamp and modernize the dilapidated railway infrastructure of Pakistan. The project has great strategic importance for Pakistan and China, as it would revive the backbone of the railway network. The project was declared a "strategic project" by the Joint Cooperation Committee (JCC) of CPEC in 2017. It, thus, reflects a high-level consensus between leadership and policymakers of both countries.

Significance of the ML-I project can be gauged from the fact that Pakistan's present railway track and allied infrastructure were initiated during the 19th century under the British Raj. In 1947, at the time of independence, Pakistan inherited the same infrastructure and continued to run it. Now population dynamics have changed and along with it the infrastructure has degraded as it is a 150 year old system.

A modern railway network is a strategic requirement of Pakistan's economy and supply chain systems. It will improve logistics transportation systems, save transportation time, promote connectivity and improve the quality of travel across the country.

The goal of connectivity through CPEC is unachievable without upgrading the ML-1 of Pakistan railways. The upgradation and expansion of ML-1 is, thus, considered as a big milestone in the improvement and modernization of Pakistan railways.

ML-I spans nearly 1,872 kilometers. The estimated cost of expansion and reconstruction of the ML-1 projects is $6.8 billion.

In 2015, technical experts from both China and Pakistan undertook a joint feasibility study. It was carried out by China Railway Eryuan Engineering Group Corporation, Ltd, NESPAK and PRACS. The report from the feasibility study was deliberated at the JCC in 2017, and at that time, the committee approved the study and gave a go-ahead for the next stage of the project i.e., realizing financial close and finalizing the design and other technical details.

Under the proposed framework, the ML-I project consists of three packages: first, to upgrade the track between Lala Musa to Lahore, Lahore to Multan, and Nawab Shah to Rohri. The second package will focus on modernization of the track between Lala Musa and Rawalpindi, Nowshera-Peshawar and Hyderabad Karachi section. The third package will focus on upgradation of Multan Khanewal to Sukkur section.

After the upgradation and completion of the project, the entire track will be a modern dual track. The speed of passenger trains will increase from existing 65-110 kilometers per hour to 160 kilometers per hour, while freight trains will be able to run at the speed of 120 kilometer per hour. Moreover, Pakistan railways will have a computer based signaling and control system, reducing inefficiencies and accidents, while grade separation will be implemented to ensure the safety of train operations.

It was in 2017 that JCC agreed to undertake the project and the framework agreement was signed in May, 2017 during the visit to Beijing of then Prime Minister Nawab Sharif. Since then, both sides have remained engaged in talks for financial closure, with work not yet commenced. For three years, both sides have negotiated on the estimated cost of the project and mode of financing.

Realizing strategic ML-1 #railway project in #Pakistan under #CPEC: A forward movement for BRI. Goal is to modernize the dilapidated railway #infrastructure of Pakistan. It has great strategic importance for both Pakistan and #China.- Global Times https://www.globaltimes.cn/page/202111/1240207.shtml#.YaUKiB35SZA.t...

Earlier, it was suggested that the project would cost more than $8 billion. This was an expensive undertaking for Pakistan, as the federal government had initially approved the project cost of $7.2 billion over eight years. Pakistan sought to reduce the cost. In 2020, both sides agreed to a reduce projected cost of $6.8 billion and the Executive Committee of the National Economic Council approved the project in August 2020.

Next, talks commenced for exploring financing arrangements for the project. Pakistan sought government concessional loan from China on low-interest rates in the USD denomination, as it considers ML-I a strategic project for both sides. China proposed a combination of commercial and concessional loans, with mix of RMB and USD components. The interest rates in Pakistan's proposed financing facility are lower than the China proposed arrangement.

Given Pakistan's current economic challenges, partly owing to the impact of the COVID-19 pandemic, it will be a difficult undertaking for Pakistan to make timely payments if it takes commercial loans for the ML-I project. It would also lead to delays in the implementation of the project and possible cost overruns. Already the start of the project has been delayed for over four years. Given ML-I is a strategic project and consensus was reached between the leaders of two countries, it is important that both sides address such issues in a timely manner for early commencement of the construction of the project.

In September, 10th JCC was held virtually and the two sides reviewed progress on CPEC projects. Pakistan and China also reviewed progress on ML-I project and decided to remain engaged on finalizing its financing arrangements. As both countries consider ML-I a strategic project, it would be in their common interest for both to display flexibility and finalize the financing mechanism through a proactive approach.

After its completion ML-I will play a major role in enhancing connectivity and supporting new economic activity. Pakistan has already proposed extension of ML-I to the Torkham border and onwards to Afghanistan. The Chinese side has expressed interest in exploring such an extension. When materialized, ML-I it will inevitably enhance connectivity with Afghanistan, Central Asia and directly enhance Pakistan and China's trade with Iran, Turkey and Central Asia and go on to become a success story of the BRI. Besides, ML-I will be cherished as China's major contribution toward Pakistan and its people's well being from an old and time tested friend. Both Pakistan and China still rejoice and take pride in the joint venture construction of the Karakoram Highway; ML-I would be an additional feather in the cap.

#Pakistan, #China agree to execute ML-1 #Railway Up-gradation Project under #CPEC on a priority basis. The agreement was reached at a virtual held meeting between the CPEC Authority and the National Development and Reforms Commission (NDRC) of China. #Transport- Business Recorder

https://www.brecorder.com/news/40161566

ISLAMABAD: Pakistan and China agreed to execute the much-awaited mega ML-1 Pakistan Railway Up-gradation Project under the China-Pakistan Economic Corridor (CPEC) on a priority basis.

The agreement was reached at a virtual held meeting between the CPEC Authority and the National Development and Reforms Commission (NDRC) of China to follow up on the decisions taken during the recent visit of the prime minister to China.

Special Assistant to Prime Minister (SAPM) on CPEC Affairs Khalid Mansoor and Director-General NDRC co-chaired the meeting.

The ambassador of Pakistan in China also participated.

The meeting decided that Pakistan Railways would immediately contact the National Railway Administration (NEA) to work out further details of the project.

ML-1 project: design fault, inadequate consultancy cause delay

The meetings also discussed the schedule for holding of meetings of Joint Working Groups (JWG) for various sectors. It was decided that meetings of the Joint Working Groups for Industrial Cooperation, Information Technology, Science and Technology and Agriculture would be held in the near future.

The NDRC director-general said that the relevant Chinese institutions were already taking the necessary actions to implement the understandings reached during the visit.

The SAPM CPEC Affairs stated that the prime minister’s meeting with the Chinese leadership had been extremely fruitful and the relevant institutions of the two countries were fully geared to take the necessary steps to translate the understandings reached at the highest level into actual actions on the ground at the earliest.

The NDRC director general stated that the relevant Chinese institutions were already taking the necessary actions to implement the understandings reached during the visit. He said that the Chinese side attaches the utmost importance to the ML-1 project and several internal meetings between the National Railway Administration and other relevant institutions have been held to work out the modalities and prepare for execution of the first phase of the project.

The meeting also discussed projects in the power sector including the 300MW Power Project in Gwadar and the 1,320 MW Thar Coal Block-1 Power project. It was noted that all actions relating to these projects had been completed on Pakistan side. It was decided that the Chinese side would expedite the next steps relating to these projects.

The meeting expressed satisfaction at the pace of implementation of various projects in Gwadar such as the East Bay Expressway, New Gwadar International Airport, Pak-China Friendship Hospital, etc.

The SAPM on CPEC Affairs expressed his gratitude to the NDRC for their support and facilitation in forwarding the agenda of the CPEC.

Here's the latest Census data on modes of #freight #transport in #US. #Trucks ($10.4 trillion) claim humongous market share. #Rail only 250 billion. https://www.census.gov/library/stories/2021/02/what-is-in-that-truc...

https://twitter.com/haqsmusings/status/1530964873567358977?s=20&...

Pakistan, China aim to jump-start Belt and Road plans in key talks

https://asia.nikkei.com/Spotlight/Belt-and-Road/Pakistan-China-aim-...


“Pakistan has agreed to increase the cost of ML-1 from $6.8 billion to $9.85 billion, on the demand of Chinese negotiators, who termed the former cost figure as unrealistic,” an official privy to CPEC planning told Nikkei Asia on condition of anonymity since he was not authorized to talk to the media. The official further added that the ML-1 project will likely be approved by the JCC, which would be a major boost for the CPEC.


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Pakistan and China aim to revive Belt and Road projects in the South Asian country at an annual huddle, scheduled to take place virtually on Thursday. In the run-up to the talks, cash-strapped Islamabad appears to have accepted a Chinese demand to increase the cost of a railway, as it seeks to secure more financing.

This will be the 11th meeting of the Joint Cooperation Committee, the key forum for making decisions on the China-Pakistan Economic Corridor (CPEC), a $50 billion Pakistan component of the Belt and Road. Zhao Shiren, the Chinese consul general in Lahore, told local media earlier this month that work on the CPEC is expected to speed up after the JCC meeting.

The center of attention now is Main Line 1, or ML-1, a project that will upgrade 1,733 kilometers of railway track between Karachi and Peshawar. This is the largest CPEC project in terms of cost, and it has been awaiting a final decision for the past five years.

"Pakistan has agreed to increase the cost of ML-1 from $6.8 billion to $9.85 billion, on the demand of Chinese negotiators, who termed the former cost figure as unrealistic," an official privy to CPEC planning told Nikkei Asia on condition of anonymity since he was not authorized to talk to the media. The official further added that the ML-1 project will likely be approved by the JCC, which would be a major boost for the CPEC.

In multiple background interviews, sources said other projects expected to get the nod include the Karachi Circular Railway at a cost of $1.33 billion and the Karakoram Highway realignment, valued at $1.8 billion.

Apart from these plans, another major issue up for discussion will be power projects. Beijing has built 12 power plants under the CPEC and Pakistan owes more than 250 billion rupees ($1.14 billion) in unpaid bills to the facilities. The JCC huddle is expected to deliberate on forming a revolving account for Chinese power producers so that they can get paid without getting entangled in Pakistan's web of debt.

Moreover, the JCC meeting might decide the fate of a 300-megawatt power plant in Gwadar -- a port intended to be a key Belt and Road hub. The Pakistani government would prefer to scrap the project as it scrambles to save money, whereas China seeks approval to start building it.

Aslam Bhootani, a member of the national assembly representing Gwadar, is not happy about the outlook. "No investment will come in Gwadar" unless the area's power problems are resolved, he said. "Scrapping the 300 MW power plant will not help in this situation."

Experts are on the fence about the prospects for rejuvenating the CPEC.

Michael Kugelman, director of the South Asia Institute at the Wilson Center, said the CPEC is in a holding pattern, with no new projects and existing projects moving very slowly out of caution over Pakistan's economic crisis, with its foreign reserves falling dangerously low.

"Given Pakistan's severe economic stress, as well as China's own recent slowdown," he said, "there will be little space for any type of new economic activity."

But the Pakistani government does have an incentive to stay in China's good books. Next week, soon after the JCC, Prime Minister Shehbaz Sharif is scheduled to visit China. This will be his first visit to Beijing as leader.

Pakistan, China aim to jump-start Belt and Road plans in key talks

https://asia.nikkei.com/Spotlight/Belt-and-Road/Pakistan-China-aim-...


According to media reports, Sharif will likely seek $10 billion in financial assistance from China, through balance of payment support and rolling over Chinese loans, which make up 30% of Pakistan's total external debt. Experts believe the Sharif government wants the JCC to be successful so that it can secure the required financial support from China during the prime minister's visit.

Despite his skepticism and the CPEC's sputtering progress, Kugelman also suggested Sharif might be the man to restore some momentum. "It was Prime Minister Sharif's brother [Nawaz Sharif] who launched the CPEC, and there's reason to believe Beijing is more comfortable working with the ruling PML-N party than with Imran Khan's PTI, which asked questions about transparency [of CPEC projects] that China didn't like," Kugelman told Nikkei.

While Sharif is planning to revive the CPEC, his political nemesis Khan is in full-throttle mode to topple his government. Even after suffering a setback last week with his disqualification from office over alleged mishandling of foreign gifts, Khan has announced a long march from Lahore to Islamabad starting Friday, demanding Sharif's resignation and fresh elections. Initially, it appeared Khan might be barred from politics for years but for now he has only been stripped of his seat in parliament.

Government officials fear the political uncertainty could jeopardize any gains made at the JCC meeting.

The instability is a problem, said James M. Dorsey, a senior fellow at the S. Rajaratnam School of International Studies in Singapore. But he said Beijing has already factored it in when making decisions about CPEC projects.

"Beijing knows that the ML-1 project is also in the interest of Pakistan and even if Khan again formed the government, he cannot reverse it," Dorsey said.

He added that the Belt and Road, in general, has been slowing down, and that efforts made to revive the CPEC are partly Beijing's attempt to fire up its broader global infrastructure drive.

China, Pakistan Agree to Launch $10 Billion Railroad Project
Two countries plan to upgrade line from Karachi to Peshawar
Pakistan officials have said they expect funding from China
By Faseeh Mangi


https://www.bloomberg.com/news/articles/2022-11-02/china-pakistan-a...

Chinese President Xi Jinping and Pakistani Prime Minister Shehbaz Sharif agreed in a meeting in Beijing to launch a high-speed rail project that could cost $9.85 billion, a move that comes as the world’s No. 2 economy moves to slow some of its lending due to growth concerns.

The two nations agreed to get started on the Main Line-1, according to a statement from Sharif’s office, which described it as “a project of strategic importance.”

That project involves upgrading a 1,163-mile, colonial-era track from Karachi to Peshawar to carry high-speed trains. Earlier this week, Pakistan formally approved the project, which has been in discussion for years, without saying where the funding would come from or providing technical details.

Officials in Pakistan have previously said they expected to get loans from China for the upgrade.

The US has in the past criticized China for using what it calls “debt diplomacy” to make developing nations more dependent on Beijing. Still, earlier this year China delayed a bailout for Pakistan as its debt soared, and it has been scaling back lending in Africa as its economy slows.

About 30% of Pakistan’s foreign debt is owed to China, including state-owned commercial banks, the International Monetary Fund said in a report in September.

In June, Moody’s Investors Service downgraded its outlook on Pakistan to negative from stable, citing financial concerns.

See: Xi Kicks Off Third Term With Flurry of Diplomatic Activity

In their talks, Xi and Sharif agreed to finalize details on an inner-city rail line in Karachi. The Chinese leader also said his nation would provide 500 million yuan ($68.7 million) to Pakistan to help it rebuild after flooding over the summer that displaced more than half a million people.

Also Wednesday, the two countries’ central banks signed a memorandum of cooperation on a yuan clearing in Pakistan, the People’s Bank of China said in a statement. It didn’t give more details.

Sharif is wrapping up a two-day visit to Beijing. China is hosting a flurry of foreign leaders this week, as Xi kicks off a norm-busting third term during which he’s vowed to increase his nation’s global influence.

Vietnam’s Communist Party chief Nguyen Phu Trong became the first foreign leader to meet Xi since the Chinese president removed rivals and installed loyalists at a leadership reshuffle last month.

Xi and his top officials are then expected to hold talks in the capital with German Chancellor Olaf Scholz and Tanzanian President Samia Suluhu Hassan. Later this month, he will likely travel to Indonesia and Thailand for major summits attended by global leaders including President Joe Biden and Russia’s Vladimir Putin.

Pakistan taps Chinese credit for railway upgrade despite debt crisis
Islamabad says $10bn revamp of colonial-era line is essential even as it faces risk of default and forex reserves plunge

https://www.ft.com/content/44c26d5c-97d2-4181-b5a4-9ef66ce776db

Ahsan Iqbal, Pakistan’s planning minister, said the ML1 upgrade was vital to keep trains running and an example of the transformative work that Chinese credit had made possible.

“If we do not undertake this project, in a couple of years Pakistan will lose its railway logistics,” Iqbal told the Financial Times.

“The whole railway system will break down, this main line will break down. It will be very risky to run commercial operations on this track. It is no longer a choice. It is an imperative.”


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Iqbal, who oversees Pakistan’s involvement in the Belt and Road Initiative, China’s international infrastructure scheme, said it would take six to nine years to complete the ML1 upgrade. The work will include replacing track, modernising signalling, converting level crossings into underpasses or flyovers and building fences to stop cattle crossing the line.

The planning minister said the project would proceed in phases “to make it more manageable”, with an initial cost of $3bn. The loan from China would be repayable over 20 to 25 years and would be “concessional”, he said, without providing further details.

Chinese lending to Pakistan goes back years, part of an effort to forge economic and military ties that will help to counter their mutual rival India. The ML1 upgrade is part of the China-Pakistan Economic Corridor, a BRI centrepiece with an estimated total cost of $60bn.

The CPEC also includes Chinese development of a deep-sea port at Gwadar in south-western Pakistan, among other projects. Beijing is separately supplying Pakistan’s military with eight submarines and advanced J-10 C fighter jets.

A western diplomat in Islamabad said that for such projects to have continued even as Beijing saw growing financial distress in BRI recipient countries pointed to the importance it put on ties with Pakistan.

“Even if the rest [of BRI] lags behind, China wants to stay the course with Pakistan,” the diplomat said, adding that the relationship had “important military aspects developed over the long term”.

The projects — and Chinese financing — have also stoked domestic tensions. Police in Gwadar last month imposed emergency measures and dismantled a protest camp that had obstructed operations at the port with demands, among others, for Chinese nationals to leave.


Projects such as ML1 have also fuelled analyst concerns over whether excessive Chinese lending is exacerbating strains on Pakistan’s precarious finances. Chinese state lenders are together among the largest creditors to Islamabad, accounting for about $30bn of its outstanding debt.

----
Sakib Sherani of advisory firm Macro Economic Insights said it was unfair to single out China’s role in Pakistan’s debt woes, with the largest repayments in the current financial year actually due to multilateral lenders.

But Chinese loans tend to carry higher interest rates than multilateral or other bilateral creditors, according to the AidData research lab at William & Mary college in the US. Chinese annual interest is typically 3-4 per cent compared with 1-2 per cent from OECD lenders, AidData said.



Even as it taps Beijing for the ML1 project, Pakistan is looking elsewhere for funds to help stabilise its shrinking reserves. The finance ministry is in talks with the IMF to secure the next tranche of a $7bn assistance programme, and has said it will approach “friendly” countries such as Saudi Arabia for more loans.

Sharif’s government is betting it can steady the economy in time for parliamentary elections that must be held before the end of this year.

Iqbal said he was confident the country would pull through. “Pakistan is facing economic [and] fiscal difficulties, but it is not in the range that it is a default economy yet. We are managing very prudently.”

ML-1, KCR (Karachi Circular Railway) upgrade projects to start in March

https://www.thenews.com.pk/print/1026277-ml-1-kcr-upgrade-projects-...

He (Ambassador Non Rong) recalled that under the CPEC, 192,000 jobs were created, 6000MW of electricity was generated, 510 km of highway was constructed and 886 km of transmission was set up, which laid a solid foundation for Pakistan’s socio-economic development. “In fact, Pakistan’s trade surplus of agricultural products is expected to exceed a record high of $1 billion in 2022,” the ambassador said.

The Chinese sources said the ML-1 is the largest infrastructure project of CPEC worth $6.86 billion. The project involves the up-gradation and dualization of ML-1 to increase the operating speed from the current 60 km/h and 105 km/h to a proposed 160 km/h. The project also involves the establishment of a dry port near Havelian. ML-1, the Karachi to Peshawar line, is one of four main railway lines in Pakistan, operated and maintained by Pakistan Railways. The line begins from Karachi City Station or Kiamari station and ends at Peshawar Cantonment Station. The total length of this railway line is 1,687 kilometers. There are 184 railway stations from Kiamari to Peshawar Cantonment on this line. The line serves as the main passenger and freight line of the country. 75 percent of the country’s cargo and passenger traffic uses the ML-1. The existing timeline for the completion of ML-1 extends to December 2024. Under the umbrella of this project, level crossing will be converted into flyovers or underpasses so that the speed can be increased by getting rid of the obstacles.

The project could not be started during the PTI government due to China’s concerns over debt repayment plan, the sources pointed out. ML-I railway line project is very important to achieve connectivity between Gwadar (Pakistan) and Kashgar (China) through a train track that will provide the easiest and safest way to transport oil between China and the Middle East, saving China travel costs. The railway line upgrade will provide faster travel facilities to the people of Pakistan and commercial benefits like bringing raw materials to the Special Economic Zone (SEZ) and faster delivery of finished goods to remote areas of the country as well Gwadar port. Another great benefit is that coal will be delivered for fuel to the power plants through the railway track, which will also generate good revenue for the railways. Due to unnecessary delays, the cost of this historic project has increased. The Imran’s PTI government failed to convince the IMF and the Chinese government to start the project. Another reason for the increase is the recent floods in Pakistan, which has destroyed the railway lines of most parts of the country. As soon as the new government was formed in April, 2022, Pakistan’s Minister for Planning Ahsan Iqbal restarted the discussion with the Chinese authorities on revival of the project.

The revived KCR operation is intended to become an inter-regional public transit system in Karachi, with an aim to connect the city centre with several industrial and commercial districts within the city and the outlying localities. In May 2017, the then government approved Rs27.9 billion ($120 million) restoration package for the KCR. However, delays and disputes with the Sindh provincial government ultimately led to cancellation of the funding. KCR would be constructed with the cost of Rs294 billion and used by 500,000 passengers/day, which would increase to 1 million in later years. KCR will have 250 modern driverless electric bullet trains, which would run 17-hours a day throughout a week. The KCR project would be run by the Sindh government through Karachi Urban Transport Corporation (KUTC) and likely to be completed by 2025.

#Chinese Gov't Commissioned Study: #China-#Pakistan #railway ‘worth it’ at estimated US$58 billion. It should proceed because of its #strategic significance. It has the potential to reshape #trade and #geopolitics across the Eurasian continent. #CPEC https://www.scmp.com/news/china/science/article/3218413/china-pakis...

Belt and Road Initiative’s most expensive transport infrastructure project ‘has potential’ to reshape trade and geopolitics
The rail link is part of a broader plan to revive ancient Silk Road connections and reduce reliance on Western-dominated routes

The China-Pakistan railway – China’s largest Belt and Road Initiative transport project – will cost an estimated 400 billion yuan (US$57.7 billion), but should proceed because of its strategic significance, a government-commissioned feasibility study has found.
The proposed railway, connecting Pakistan’s port of Gwadar to Kashgar in China’s Xinjiang Uygur autonomous region, was assessed by scientists from the state-owned China Railway First Survey and Design Institute Group Co Ltd.
The team, led by the institute’s deputy director of capital operations Zhang Ling, said the project was the belt and road plan’s most expensive transport infrastructure.
Despite the cost, the project had the potential to reshape trade and geopolitics across the Eurasian continent and should be supported, the team said in a report published by the Chinese-language journal Railway Transport and Economy in April.
“The government and financial institutions [in China] should provide strong support, increase coordination and collaboration among relevant domestic departments, strive for the injection of support funds and provide strong policy support and guarantees for the construction of this project,” they said.
The institute is one of the largest of its kind in China and has been involved in many major railway projects at home and internationally, including Indonesia’s Jakarta-Bandung high-speed rail line.
The 3,000km (1,860-mile) railway will link China’s western regions with the Arabian Sea, bypassing the Strait of Malacca and reducing dependence on the South China Sea.
Connections with other transport networks – including in Iran and Turkey – would also provide a more direct route to Europe for Chinese goods, while Pakistan is forecast to get a much-needed boost from the improved infrastructure and easier trade with China.
The scheme is a key component of Beijing’s broader belt and road plan to promote economic cooperation and connectivity among the countries along the ancient Silk Road trade routes.
Previous studies by Chinese government researchers have suggested the infrastructure initiative could have significant geopolitical implications, helping to shift the balance of power away from traditional Western-dominated trade routes.
As well as encouraging a more multipolar world order, the belt and road plan could also help to promote economic development and stability in countries along the route by creating jobs, boosting infrastructure investment and increasing trade, the studies said.
Most belt and road transport infrastructure construction projects had received a significant proportion of funding from the host countries, and the scale of investment was much smaller, Zhang and his colleagues noted.
For example, total investment in Kenya’s Mombasa-Nairobi standard gauge railway was US$3.8 billion, with China providing 5 per cent of the funding and Kenya paying for the rest.

#Chinese Gov't Commissioned Study: #China-#Pakistan #railway ‘worth it’ at estimated US$58 billion. It should proceed because of its #strategic significance. It has the potential to reshape #trade and #geopolitics across the Eurasian continent. #CPEC https://www.scmp.com/news/china/science/article/3218413/china-pakis...


The project connects the port city to the Kenyan capital and is part of a larger plan to link East African countries by rail. Similarly, China contributed 30 per cent of the US$4 billion funding for the Addis Ababa-Djibouti rail line in Ethiopia.
China covered 75 per cent of the Jakarta-Bandung high-speed railway’s costs of US$5.9 billion, with Indonesian state-owned enterprises providing the remainder.
But Pakistan is unable to make a similar contribution. Its GDP last year was US$370 billion – just six times the estimated cost of the project.
“Due to energy shortages, poor investment environment and fiscal deficits,


Pakistan’s economic growth rate has come under pressure,” the team said.
“In terms of railway investment and construction, Pakistan is unable to provide sufficient financial and material support and mainly relies on Chinese enterprises for investment and construction.”

One reason for the hefty cost is the mountainous and geologically complex terrain along the route. There could be technical challenges to overcome in the construction and operation of the railway, the researchers said.
The project also required supporting infrastructure – such as ports and logistics facilities – that might not be immediately available in Pakistan, they said.

The study said Pakistan’s labour policies could be unpredictable, which could potentially affect the railway’s construction and operating costs.
The team also noted that Pakistan had experienced security challenges in recent years, including in its western region where the railway will pass through. Balochistan province, for instance, has been plagued by separatist violence for decades.

This could potentially disrupt construction and operation of the railway and pose a risk to Chinese workers and investments, the researchers said.
The study also pointed out the railway’s potential impact on neighbouring countries, such as India. With each country having its own priorities and interests, there could be disagreements or delays in decision-making related to the project, it said.
Zhang’s team suggested that a build and transfer (BT) model would provide the best investment and financing strategy for the project.
They considered BT against build-operate-transfer, public-private partnerships, and the engineering, procurement, construction mode that are becoming more popular in belt and road projects.


In the BT model, a contractor would be responsible for designing, building and financing the railway, with payment on completion and ownership transferred to the government or other commissioning entity.
The researchers said BT would allow the risks associated with the railway’s construction and operation to be allocated more effectively between China and Pakistan, potentially reducing the financial risks for both parties.
By ensuring that ownership of the railway was transferred to Pakistan, BT could also help to build trust between China and Pakistan by showing China’s commitment to supporting Pakistan’s long-term economic development, they said.
China and Pakistan have been talking for years about the railway, a crucial part of the China-Pakistan Economic Corridor (CPEC) that was launched in 2015 and aims to connect Gwadar port to Xinjiang through a network of roads, railways and pipelines.
The researchers said the China-Pakistan relationship was complex, with both countries having different priorities and interests.
Negotiating agreements related to financing, labour policies, and other issues would require careful consideration of each country’s priorities and interests, they said.
In conclusion, Zhang and his team said their recommendation could help to move negotiations forward.

EIU (Economic Intelligence Unit)report

China Going Global Investment Index 2023
This year’s edition of the China Going Global Investment Index ranks 80 economies across nearly 200 indicators to identify opportunities and risk for Chinese firms and investors looking to expand globally.

A decade since Xi Jinping’s Belt and Road Initiative (BRI) launched in 2013, Chinese firms have become formidable investors globally, and the flow of overseas investment is set to increase over the next decade.